TREASURIES-US yields mixed as markets await Greenland details; data backs Fed pause

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Trump says US will have total, permanent access to Greenland

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Even with Greenland deal, caution persists -strategist

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US data mixed, inflation benign, but little rates reaction

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US yield curve continues to flatten, as tariff risk off for now

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US 10-year TIPS auction shows weak results

(Adds new comment, results of the US 10-year TIPS auction, updates yields)

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 22 (Reuters) - U.S. Treasury yields were narrowly mixed on Thursday, with shorter-dated rates edging higher and longer maturities slipping, as investors braced for bouts of volatility and awaited further clarity on the Greenland framework deal negotiated by President Trump with European leaders.

Thursday's ?economic numbers were also broadly solid, underscoring the economy's continued resilience. The data also reinforced expectations that the Federal Reserve will pause its rate-cutting cycle at its policy meeting next week, helping support U.S. yields on the short end as ?well.

The bond market, however, remained highly sensitive to geopolitical headlines.

Trump said on Thursday he had secured total and permanent U.S. access to Greenland in a deal with ?NATO, whose head said allies would have to step up their commitment to Arctic security to ward off threats from ?Russia and China.

His comments came a day ?after the U.S. commander-in-chief withdrew his tariff threats on European goods and ruled out taking Greenland by force. That calmed bond investors who had sold Treasuries the last few days amid global tension between the United States and ?Europe.

"It is a relief, but at the same time, it increased the market's wariness around ?the potential for this to happen again," said Tony Rodriguez, head of fixed income strategy at Nuveen.

"Geopolitical risk from tariffs specifically from a policy perspective is probably going to remain a risk factor for the market, more than people thought...a month ago."

In afternoon trading, the benchmark U.S. ?10-year yield was flat to slightly lower at 4.251%, after climbing on Tuesday to ?its loftiest level since ?late August.

U.S. 30-year bond yields fell 2.2 basis points (bps) to 4.848%. On Tuesday, they rose to their highest since early September.

On the front end of the curve, the U.S. 2-year yield was up 1.5 bps at 3.612%.

"The market has become a little bit more numb to the idea of tariffs. ?This is not new, this has been going on," said John Flahive, head of wealth investment solutions & co-head of municipal bonds at Insight Investment.

"We did see a little bit of uptick in inflation expectations with this latest one (Greenland and European tariffs). But it's pretty immaterial..In our opinion, there's enough common factors to the cost of goods going up that will again keep inflation sticky."

LACKLUSTER TIPS AUCTION

An auction of $21 billion in 10-year U.S. Treasury Inflation-Protected Securities (TIPS) came out lackluster on Thursday, pricing at 1.94%, higher than the expected yield at the bid deadline. The outcome suggested weak demand as investors demanded a premium to the yield to take down the inflation-protected note.

The bid-to-cover ratio was 2.38, lower ?than the last 10-year ?TIPS auction.

Following the sale, the U.S. 10-year TIPS yield was last slightly up at 1.876%.

Thursday's U.S. economic reports, meanwhile, meanwhile modestly boosted shorter-dated yields.

Data showed the number of Americans filing new applications for unemployment benefits increased marginally last week by 1,000 to a seasonally adjusted 200,000 for the week ended January ?17. Economists polled by Reuters had forecast claims of 210,000.

A separate report showed gross domestic product increased at an upwardly revised 4.4% annualized rate, the fastest pace since the third quarter of 2023. The economy was initially estimated to have grown at a 4.3% rate in the July-September quarter. It grew at a 3.8% pace in the second quarter.

In other parts of the bond market, the yield curve continued to flatten on Thursday, as investors priced out the threat of tariffs for now, modestly easing inflation worries. The spread between two-year and 10-year yields narrowed to 63.7 bps from 65.4 bps the previous session.

The curve had steepened to as much as 70.9 bps on Tuesday, the largest gap in roughly two weeks, reflecting market concerns about sticky consumer prices.

That ?said, data for October and November showed generally benign inflation numbers in the wake of a government shutdown. The PCE price index grew 0.2% in November, matching October's gain. In the 12 months through November, the PCE price index climbed 2.8% after rising 2.7% in October.

Excluding the volatile food and energy components, the PCE price index rose 0.2%, with the same margin in October. In the 12 months through November, the so-called core ?inflation increased 2.8% after advancing 2.7% in October.

Analysts say, however, that December's inflation figures are likely to come in stronger. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci and Diane Craft)